Hello Traders,

Well, it happened, the markets is still recovering
from the NFP aftermath and after that sharp move upwards we were expecting this
sort of sideways movement for the short term which historically lasts about 2
trading days and yesterday being the day, we should expect some movements today.
To start with, RBA decided to keep its borrowing rate constant at 1.75% and
while this caused a bullish frenzy in the AUD-and especially gaining 1.01%
against the greenback, a move which was interpreted mainly as a repricing move
by the of RBA. This gain has a transititory effect of the NZD and as a result the
Kiwi gained to our advantage with major concern being inflation which has
failed to rise above expectations in major economies and of course, speculation
in energy prices in the medium to long term. In the Asian session the Chinese
trade balance was reported and it printed at 325B against 358Be and a
significant improvement from last month’s 298B in Yuan denominations. Overly, imports
are still strong at -0.4% from expected yearly change of -6.8% with major
imports being Crude Oil and Oil related products.

Let’s have a look at the charts:

Daily Chart Analysis

If you check today’s candlestick, you will observe
that there were some selling pressure right after the NY close and  after which price moved up after the Chine
Trade balance news was released. Now, technically, we expect price to move
upwards towards the 50.0% Yearly Fibonacci which represents our double tops
recorded in early may and Mid April-which is also this year’s highs. It is also
important to note that price action is trending above the resistance line at
0.685 and is within a thin channel covering the 0.685 and the all important
0.700 level which is very important in everything RBNZ. Remember previously we
had mentioned that any price above 0.7 will trigger some monetary action and
what a right time for that as price is at 0.699 with one of the reasons being
the competitiveness of New Zealand exports in the global markets. Watch out for
this event at 9PM GMT where rate is expected to remain unchanged at 2.25%. Before
this we shall have the crude oil inventories at 1430 Hrs with projections at
-3.2% from last week’s -1.4M.

4HR
Chart Analysis

Price is trending higher with both the stochastics
and OBV deep in the overbought region. However, if you look closely at the BB,
prices are making a series of lower highs with the upper BB and we expect
prices to dip in the coming few trading hours with this current bar being our
marker.

15 Min Chart Analysis

From yesterday’s Hi-Lo, price reversed sharply
from the 61.8 Fibonacci level and as usual, the target goes to 161.8 Fibonacci extensions
forming a confluence with the 50.0 Yearly Fibonacci level. If anything, the
0.74 area is a strong reversal zone and we should watch out closely on what
could happen at that area.

From my analysis price might bounce off from
yesterday’s highs and bounce to 0.74 area where selling pressure should be
expected late in the NY session.

Have a pipful day

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